Deal Analysis for Friday:
1H Chart for GBP/USD
The GBP/USD pair experienced a slight correction on Friday, within an upward trend that has been developing for several weeks. The macroeconomic and fundamental backdrop was absent, as the market rested after the important Fed meeting and prepared for an even more significant week, during which the long-awaited reports on the labor market, unemployment, and inflation will be published in the US, along with the inflation report, unemployment report, and the Bank of England meeting in the UK. As we can see, this week will feature not just important, but super-important events, so there are good grounds to expect higher volatility than what we've observed in recent weeks and even months. However, at the same time, predicting where the British pound and the dollar will end up by the end of the week is impossible—there will be too much news and events. Therefore, beginner traders should exercise caution this week and keep a close eye on the events calendar. The upward trend remains intact, but prices could potentially break the trend line this week.
5M Chart for GBP/USD
On the 5-minute timeframe, no trading signals were formed on Friday, as the price did not approach any of the levels. Thus, there were no grounds for beginners to open trades.
How to Trade on Monday:
On the hourly timeframe, the GBP/USD pair continues to build a local upward trend. As mentioned earlier, there are no global grounds for medium-term dollar growth, so we expect movement only to the North. Overall, we also anticipate the resumption of the global upward trend of 2025, which could lead the pair to the 1.4000 mark in the next couple of months.
On Monday, beginner traders may consider new long positions if the price bounces off the trend line or the 1.3319-1.3331 area, targeting 1.3413-1.3421. If the specified area is broken, short positions will become relevant with a target of 1.3212.
On the 5-minute timeframe, trading can now consider the following levels: 1.2913, 1.2980-1.2993, 1.3043, 1.3096-1.3107, 1.3203-1.3212, 1.3259-1.3267, 1.3319-1.3331, 1.3413-1.3421, 1.3466-1.3475, 1.3529-1.3543, 1.3574-1.3590. No interesting events are scheduled in the UK or the US for Monday; however, the rest of the week will feature plenty of significant events. Thus, Monday may see the market resting for another day, while we expect increased volatility and movements depending on the nature of incoming data starting Tuesday.
Key Rules of the Trading System:
- The strength of a signal is assessed by the time it takes to form the signal (bounce or breakout). The less time it takes, the stronger the signal.
- If two or more trades were opened near any level based on false signals, all subsequent signals from that level should be ignored.
- In a flat, any pair can create numerous false signals or none at all. In any case, it's better to stop trading at the first signs of a flat.
- Trades are opened during the period between the start of the European session and the middle of the American session, after which all trades must be closed manually.
- On the hourly timeframe, when trading based on signals from the MACD indicator, it is preferable to trade only when good volatility is present, and a trend is confirmed by a trend line or channel.
- If two levels are positioned too closely to each other (5 to 20 points), they should be viewed as a support or resistance area.
- After moving 20 pips in the right direction, set the Stop Loss to breakeven.
Chart Explanation:
- Support and Resistance Levels: Levels that serve as targets for opening buys or sells. Take Profit levels can be placed near them.
- Red Lines: Channels or trend lines that reflect the current trend and indicate the preferred direction for trading.
- MACD Indicator (14, 22, 3): A histogram and signal line, a supplementary indicator that can also be used as a source of signals.
Important Note: Significant speeches and reports (always included in the news calendar) can greatly influence the movement of the currency pair. Therefore, during their release, it is advisable to trade cautiously or exit the market to avoid sharp reversals against the preceding movement.
Remember: For beginners trading in the Forex market, it is important to understand that not every trade can be profitable. Developing a clear strategy and practicing money management are keys to long-term trading success.
